At the ongoing 11th Conference of the Parties (COP11) to the United Nations Convention on Biological Diversity (CBD) in Hyderabad, the hot topic is funds and how to mobilize it. The mega-conference is taking place in the shadow of a global economic slowdown, and delegates gathered at this southern Indian city are most concerned about how to drum up funds to tackle the world’s shrinking biodiversity – the variety of animal and plant life on earth.

In the first week of the October 8-19 conference, the thorny issue of access and benefit sharing (ABS) of genetic resources surfaced but the discussion was procedural, rather than substantive. Everybody seems to agree that much more needs to be done by way of ‘capacity building’ in order to implement the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization to the Convention on Biological Diversity, but countries differ on how best to pay for this.

The Nagoya Protocol is important because it provides a legal framework to implement one of the core objectives of the CBD – fair and equitable sharing of benefits arising out of the utilization of genetic resources.

But ratification has been slow. Ninety-two countries have signed the Protocol since it was finalised at the last biodiversity summit in 2010. Only six have ratified it. The Protocol will enter into force 90 days after the 50th country ratifies it.

In theory, few oppose ABS, which says, for example, that if a cosmetics firm gets access to turmeric and to the traditional knowledge that it is good for the skin, it makes a cream to sell in the market and should share the benefit with the community that has protected the turmeric as well as that knowledge. But it is a tricky issue in practice because it touches upon sovereign rights of states on their resources, relations with indigenous and local communities, and economic and technological development in provider countries.

India, the COP11 host and CBD chair for the next two years, is one of the world’s mega-diverse countries, and also has a thriving biotechnology industry.

“The Indian biotechnology industry has evolved over the last three decades to a mid-maturity stage,” notes Indian Biotechnology: The Roadmap to the Next Decade and Beyond, a May 2012 report [pdf, 14 MB] by the Association of Biotechnology Led Enterprises (ABLE), an industry lobby group. “The sector’s revenues have rapidly increased from US$500 million in 2003 to US$4 billion in 2011, growing at an average rate of 20% year on year. If a favourable business environment is created, the biotechnology and healthcare sectors combined will be able to grow at a rate of 25-30% and have the potential to generate revenues of US$100 billion by 2025.”

In the run-up to COP11, India announced that its Union Cabinet had approved ratification of the Nagoya Protocol. Procedural formalities are being worked out.

“India will figure in the list of countries which have ratified as soon as we receive official notification of the ratification,” Valérie Normand, senior program officer, Access & Benefit Sharing at the CBD Secretariat, told Intellectual Property Watch. The Protocol is vital to India’s interests, given that it has seven to eight per cent of the world’s recorded species and a vast repertoire of traditional knowledge, including a rich history of alternative medicine systems such as Ayurveda, Unani and Siddha, which use natural resources.

The European Commission (EC) agrees. In a 4 October backgrounder, it said: “Access and benefit sharing has always been controversial because it involves the sovereign rights of states on their resources, relations with indigenous and local communities, and economic and technological development in provider countries. The convention includes a provision to obtain the prior informed consent of, and to share benefits with, provider countries when their genetic resources are used…. Although the CBD is legally binding, it requires countries to develop national legislation to implement it, and while many developing countries have established access legislation, this is not the case in numerous industrialized countries. This has meant that users of genetic resources in industrialized countries have had no legal obligation to share any benefits, particularly as they gain access to genetic resources via intermediaries and are generally not involved in collecting genetic resources from developing countries.”

The EC introduced a draft regulation on 4 October to plug this gap. It will now go to the European Parliament and the Council.

India’s burgeoning biotech industry has reacted to the decision to ratify the Nagoya Protocol with guarded optimism. Seetharama Nadoor, executive director ABLE’s Agriculture Group, told Intellectual Property Watch, “It is a welcome decision. India is a global player, and we need to be confident of ourselves to take leadership role in evolving such a global system, rather than lagging behind.”

Nadoor, who is attending the COP in Hyderabad, added, “So long as we know how to implement our own laws and the provisions of international agreements, we will be at an advantage. About 50% of the diversity among the crops we grow is indigenous and the rest comes from other countries. So, we cannot be pretending to be only ‘givers’ and not ‘recipients’. As a large country with great potential for both these activities, we need to be confident about the future, and not to be scared for being responsibly ‘open’ so far as exchanges are concerned. Biodiversity is to be used for human welfare without destroying it, and wherever possible by enriching it.”

Indian activists have a different take. A background document put out by the Campaign for Conservation and Community Control over Biodiversity flagged key concerns of the civil society. “Amongst the many challenges with respect to ABS, the toughest are post grant of access – ensuring ‘benefit sharing’. That requires reaching out to the legitimate local ‘benefit claimers’, which are yet to be fully identified in most cases.” Other Indian NGOs say while the National Biodiversity Authority continues to grant approvals for access, the benefit sharing framework is still in the making.

What are the domestic measures sought by India’s biotech industry? Nadoor said, “A country may use existing laws or make new ones. India may go for a new comprehensive law dealing with the subject depending on the consensus of various stakeholders. We need to emphasise greater capacity building, and still more on effective management of resources. It is a challenge to organize benefits sharing in many cases, and India needs to be pragmatic on this count, and lead the rest of the nations by evolving a practical policy and methodology.”

Though finance is dominating the discussions at the COP, the need for capacity building to operationalize the Nagoya Protocol is emerging as a key issue on which there is agreement. Pierre du Plessis, an ABS negotiator for Namibia, told Intellectual Property Watch from Hyderabad, “Overall, there has been a high degree of consensus on ABS here, mainly because we all agree that the current priority is to make progress on the ratification, entry into force and implementation of the Nagoya Protocol. I don’t foresee many disagreements coming up – at least not here. Capacity building is needed at all levels and in all countries. But of course, it can go as fast as resources allow.”

Governments have differed on “whether and how to fund ABS activities until the Nagoya Protocol enters into force, and for parties to the CBD that are not (yet) parties to the NP [Protocol],” du Plessis pointed out. “This is an issue that comes up more in the context of funding discussions e.g. budget, resource mobilization and guidance to the GEF (Global Environmental Facility).” GEF often does the funding.

According to du Pleissis, “There is more to ABS than the Nagoya Protocol, and ABS (specifically the obligations under CBD Art 15.7) should be on, and be kept on, the COP agenda, to avoid a situation arising where parties that do not ratify the Nagoya Protocol are not held accountable for their ABS obligations under the Convention. This is an issue that the African Group will continue to pursue at future COPs, unless and until a better solution is devised.”

Few observers expect a resolution of this thorny issue at the current COP. Their hope is that at least 50 countries will ratify the Nagoya Protocol next year, so that it comes into force, and more substantive decisions on how to make it work can be taken in about two or three years from now.